Press Release|Insurance
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KBRA Affirms Ratings for Obsidian Insurance Holdings and Subsidiaries

23 Jul 2025   |   New York

Contacts

KBRA affirms the BBB- issuer rating of Obsidian Insurance Holdings, Inc. (OIH) and the BBB- senior unsecured debt rating on OIH’s debt due 2025. Additionally, KBRA affirms the A- insurance financial strength (IFSR) ratings on OIH’s subsidiaries Obsidian Specialty Insurance Company (OSIC), Obsidian Insurance Company (OIC), and Obsidian Pacific Insurance Company (OPIC). The Outlook for all ratings is Stable.

The ratings for OSIC, OIC, OPIC and OIH reflect an experienced management team with extensive relationships across the industry, positioning to capitalize on an attractive market opportunity in a fee-based business, a conservative investment portfolio with a strong credit quality and liquidity profile, and an experienced financial sponsor. Genstar has significant experience in the insurance and insurance-related space and provides capital as well as consultative advice and industry relationships to Obsidian.

Considerations offsetting these credit strengths are execution risk, which is beginning to wane with Obsidian’s continued progress developing its business; extensive reliance on reinsurance, which generates counterparty credit exposure and the challenge of consistently securing appropriate and cost-effective reinsurance; key executive risk; and untested and still developing risk management, which is benefitting from continuing material enhancements.

Factors that could lead to an upgrade include sustained growth in earnings and capital, prudent management of premium leverage and risk exposures, demonstrated progress toward establishing robust ordinary dividend capacity, or evidence of a strong and solidifying market position.

Factors that could lead to a downgrade include a material inability to execute on the business plan provided to KBRA, significant deterioration in risk profile, departure of key personnel without suitable replacement, or lack of risk management maturation.

Obsidian is a hybrid fronting carrier focused on the U.S. property/casualty and specialty markets. OIC and OPIC are admitted carriers and OSIC is a surplus lines carrier. Each program is supported by an individualized panel of reinsurers, and Obsidian underwrites and participates as a risk taker on programs.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010471